Schneider National Carriers, Inc. v. Kaba & Sons LLC

CourtDistrict Court, M.D. Pennsylvania
DecidedOctober 19, 2023
Docket4:23-cv-00792
StatusUnknown

This text of Schneider National Carriers, Inc. v. Kaba & Sons LLC (Schneider National Carriers, Inc. v. Kaba & Sons LLC) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schneider National Carriers, Inc. v. Kaba & Sons LLC, (M.D. Pa. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

SCHNEIDER NATIONAL No. 4:23-CV-00792 CARRIERS, INC., as assignee and subrogee of Church & Dwight, Inc., (Chief Judge Brann)

Plaintiff,

v.

KABA & SONS LLC,

Defendant.

MEMORANDUM OPINION

OCTOBER 19, 2023 I. BACKGROUND This case was initially filed by Schneider National Carriers, Inc. (“SNC”) against Kaba & Sons LLC (“Kaba”) on May 12, 2023.1 A summons was issued on May 16, 2023, and an affidavit of service was filed on July 14, 2023.2 For the past three months Kaba has failed to appear before this Court at all. SNC moved for entry of default on July 22, 2023, and default was subsequently entered by the Clerk of Court.3 Then, SNC moved for default judgment on August 9, 2023.4 Still, in all of that intervening time, the Defendant has refused to respond, and therefore the motion is now ripe for disposition. For the reasons that follow, the motion is granted.

1 Doc. 1. 2 Docs. 2-3. 3 Docs. 5-6. II. DISCUSSION A. Default Judgment is Warranted

Federal Rule of Civil Procedure 55 allows the District Court to enter default judgment upon application by a party.5 “Generally, the entry of a default judgment is disfavored, and a court is required to exercise sound judicial discretion in deciding whether to enter default judgment.”6 “This element of discretion makes it clear that

the party making the request is not entitled to a default judgment as of right, even when defendant is technically in default and that fact has been noted under Rule 55(a).”7 It is “well settled that decisions relating to default judgments are committed

to the sound discretion of the district court.”8 The Court must consider three factors in deciding whether to grant default judgment: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant’s delay is

due to culpable conduct.”9 “But when a defendant has failed to appear or respond in any fashion to the complaint, this analysis is necessarily one-sided; entry of default judgment is typically appropriate in such circumstances at least until the defendant

5 Fed. R. Civ. P. 55(b)(2). 6 Kibbie v. BP/Citibank, 3:cv-08-1804, 2010 U.S. Dist. LEXIS 62346 at *5 (M.D. Pa. June 23, 2010). 7 10A Charles Alan Wright and Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE, § 2685 (Apr. 2020 Update). 8 Pesotski v. Summa & Lezzi, Inc., No. 1:17-cv-00221, 2017 U.S. Dist. LEXIS 122285, at *5 (M.D. Pa. Aug. 3, 2017) (citing Emasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). 9 Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). comes forward with a motion to set aside the default judgment under Rule 55(c).”10 In cases where a defendant fails to appear, this Court may enter default judgment

“based solely on the fact that the default has occurred.”11 The Court nevertheless considers those factors for the sake of completeness; in this case, they favor the grant of default judgment. First, SNC would be prejudiced

by its “current inability to proceed with [its] action due to Defendant[’s] failure to defend.”12 Kaba’s decision to not appear before this Court would otherwise prevent Plaintiff from recovering any damages for its claim. Similarly, the second factor points in favor of the grant of default judgment. “Defendant has not responded to the

allegations and, thereby, has failed to assert a defense.”13 Finally, there does not appear to be any excuse for Kaba’s failure to appear or otherwise respond to SNC’s complaint. Service was provided on Samantha Gossley on June 6, 2023, who has been designated by Kaba to accept service on its behalf.14 Having received service,

Kaba has yet to respond or appear in this action. Because Defendant has offered no explanation for its failure to engage in the litigation, the Court finds that Kaba is culpable.15 Therefore, default judgment is appropriate in these circumstances.

10 Deutsche Bank Nat. Trust Co. v. Strunz, No. 1:12-cv-01678, 2013 U.S. Dist. LEXIS 3293 at *4 (M.D. Pa. Jan. 9, 2013). 11 Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 177 n. 9 (3d Cir. 1990). 12 Broad. Music, Inc. v. Kujo Long, LLC, No. 1:14-cv-00449, 2014 U.S. Dist. LEXIS 113180, at *5 (M.D. Pa. Aug. 14, 2014). 13 Pesotski, 2017 U.S. Dist. LEXIS 122285 at *3. 14 Doc. 4; Doc. 1 ¶2. 15 See Laborers Local Union 158 v. Shaffer, No. 1:CV-10-1524, 2011 U.S. Dist. LEXIS 40006 (M.D. Pa. Apr. 13, 2011). A finding that default judgment is warranted, however, “is not the end of the inquiry.”16 First, the Court must consider whether the “unchallenged facts constitute

a legitimate cause of action.”17 Although the defaulting party does not concede conclusions of law, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.”18 SNC’s complaint seeks damages

from Kaba under the Carmack Amendment and for breach of contract. The Court now considers whether the allegations in the complaint, taken as true, state a claim. B. Jurisdiction This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, and 1367,

and 49 U.S.C. § 14706(d). Although the parties’ contract contains a mandatory arbitration provision,19 a Defendant waives its right to enforce an arbitration agreement when it knowingly acts inconsistently with that right; that inconsistent act need not cause any prejudice for waiver to be had.20 As already discussed, Defendant

has received service and failed to respond. Defaulting on a claim is indisputably inconsistent with assertion of the right to enforce an arbitration clause. Therefore, the Federal Arbitration Act provides no bar to this Court’s jurisdiction over the case.

16 Martin v. Nat’l Check Recovery Servs., LLC, No. 1:12-CV-1230, 2016 U.S. Dist. LEXIS 89745 at *2 (M.D. Pa. July 11, 2016). 17 Broad. Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F.Supp.2d 537, 541 (E.D. Pa. 2008). 18 Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). 19 Doc. 1-2 at 19, ¶45 (“Arbitration in the manner set forth herein shall be and is the exclusive remedy for any Arbitrable Dispute.”); see 9 U.S.C. § 2 et seq. (LEXIS 2023). 20 Morgan v. Sundance, Inc., 142 S.Ct. 1708, 1712 (2022). The parties’ contract also states that “state or federal courts” in Wisconsin have “exclusive jurisdiction” where the arbitration clause does not apply.21

However, “forum selection clauses, however interpreted, have no bearing on a court’s subject matter jurisdiction.”22 “[T]he applicability of a forum selection or choice-of-law clause is not a jurisdictional issue and a party may waive its right to enforce it.”23 Having failed to appear in Court and thus necessarily having failed to

assert the forum selection clause, Kaba has waived its right to enforce that clause.

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Schneider National Carriers, Inc. v. Kaba & Sons LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schneider-national-carriers-inc-v-kaba-sons-llc-pamd-2023.